"The aim of this activity is to assess whether the claimant is able to make budgeting decisions, either simple or complex."
"Assistance in this activity refers to another person carrying out
elements, although not all, of the decision making process for the
"A mental health condition may affect a
person’s ability to make complex budgeting decisions. Complex budgeting
decisions are not just a string of simple sums, but the ability to respond
appropriately to changing circumstances and events, as income and
outgoings change, new demands are made, new things become priorities etc.
This ability to respond to events makes this
descriptor quite different. Because of this, conditions such as depression
can have an impact if they mean that the person is unable to respond to
these changing circumstances and demands.
You should look at the decision making process itself. Does the claimant
understand that the bill must be paid and how that will affect their other
finances, if they need to make adjustments to their spending elsewhere, or
need to ask for extra time to pay? Do they understand that money must last
a period of time, and be parcelled out over that period in order that it
the next piece of income arrives, and do they have the ability to do that?
So, an example of someone who needs prompting/assistance to manage complex
budgeting decisions may be where a claimant can manage day to day simple
budgeting decisions, e.g. when food shopping, buying clothes etc. but not
longer term finances. This activity does not take in to account a person’s
choices around budgeting, but simply their functional ability. So if a
person spends all their money at the start of the month and cannot
prioritise spending, this must be due to a health condition in order to
Complex budgeting decisions
"Complex budgeting decisions are those that are
involved in calculating household and personal budgets,
managing and paying bills and planning future purchases."
"The activity does not include
the sort of decisions which require financial knowledge, such as
calculating interest rates or comparing mortgages. This is well beyond
what is considered as complex.
Complex budgeting involves calculating household and personal budgets
(e.g. knowing how much money is left to spend once bills and rent is
paid), managing and paying bills (e.g. setting aside money from income
for gas and electricity bills) and planning future purchases (e.g.
knowing that saving is required when necessary)."
Simple budgeting decisions
"Simple budgeting decisions are those that are involved in activities
such as calculating the cost of goods and change required following
Last updated May 2016